Rule2024-13047
Allocation of Assets in Single-Employer Plans; Interest Assumptions for Valuing Benefits
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 14, 2024
Effective
July 1, 2024
Issuing agencies
Pension Benefit Guaranty Corporation
Abstract
This final rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the asset allocation regulation for plans with valuation dates of July 1-July 30, 2024. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
Full Text
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<title>Federal Register, Volume 89 Issue 116 (Friday, June 14, 2024)</title>
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[Federal Register Volume 89, Number 116 (Friday, June 14, 2024)]
[Rules and Regulations]
[Pages 50526-50527]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13047]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4044
Allocation of Assets in Single-Employer Plans; Interest
Assumptions for Valuing Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This final rule amends the Pension Benefit Guaranty
Corporation's regulation on Allocation of Assets in Single-Employer
Plans to prescribe interest assumptions under the asset allocation
regulation for plans with valuation dates of July 1-July 30, 2024.
These interest assumptions are used for valuing benefits under
terminating single-employer plans and for other purposes.
DATES: Effective July 1, 2024.
FOR FURTHER INFORMATION CONTACT: Monica O'Donnell
(<a href="/cdn-cgi/l/email-protection#264942494848434a4a084b49484f4547665644414508414950"><span class="__cf_email__" data-cfemail="335c575c5d5d565f5f1d5e5c5d5a505273435154501d545c45">[email protected]</span></a>), Attorney, Office of the General Counsel,
Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington,
DC 20024-2101, 202-229-8706. If you are deaf or hard of hearing or have
a speech disability, please dial 7-1-1 to access telecommunications
relay services.
SUPPLEMENTARY INFORMATION: PBGC's regulation on Allocation of Assets in
Single-Employer Plans (29 CFR part 4044) prescribes actuarial
assumptions--including interest assumptions--for valuing benefits under
terminating single-employer plans covered by title IV of the Employee
Retirement Income Security Act of 1974 (ERISA). The interest
assumptions in the regulation are also posted on PBGC's website
(<a href="http://www.pbgc.gov">www.pbgc.gov</a>).
PBGC uses the interest assumptions in appendix B to part 4044
(``Interest Rates Used to Value Benefits'') to determine the present
value of annuities in an involuntary or distress termination of a
single-employer plan under the asset allocation regulation. The
assumptions are also used to determine the value of multiemployer plan
benefits and certain assets when a plan terminates by mass withdrawal
in accordance with PBGC's regulation on Duties of Plan Sponsor
Following Mass Withdrawal (29 CFR part 4281).
The July 1-July 30, 2024 interest assumptions will be 5.11 percent
for the first 20 years following the valuation date and 4.83 percent
thereafter. In comparison with the interest assumptions in effect for
the second quarter of 2024, these interest assumptions represent no
change in the select period (the period during which the select rate
(the initial rate) applies), a decrease of 0.39 percent in the select
rate, and no change in the ultimate rate (the final rate).
This final rule is the last rule that PBGC will publish for the
interest assumption using the select and ultimate approach. On June 6,
2024, PBGC issued a final rule at 89 FR 48291 that changes the
structure of the interest assumption for valuation dates on or after
July 31, 2024, from the select and ultimate approach to a yield curve
approach. As described in the June 6 final rule, under the yield curve
approach, the interest assumption is based on a blend of two publicly
available yield curves that is adjusted to the extent necessary so that
the resulting liabilities align with group annuity prices. PBGC will
determine and publish those adjustments (i.e., ``spreads'') quarterly
based on survey data on pricing of private-sector group annuities.
Need for Immediate Guidance
PBGC has determined that notice of, and public comment on, this
rule are impracticable, unnecessary, and contrary to the public
interest. PBGC routinely updates the interest assumptions in appendix B
of the asset allocation regulation each quarter so that they are
available to value benefits. Accordingly, PBGC finds that the public
interest is best served by issuing this rule expeditiously, without an
opportunity for notice and comment, and that good cause exists for
making the assumptions set forth in this amendment effective less than
30 days after publication.
PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects in 29 CFR Part 4044
Employee benefit plans, Pension insurance, Pensions.
In consideration of the foregoing, 29 CFR part 4044 is amended as
follows:
PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS
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1. The authority citation for part 4044 continues to read as follows:
Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.
[[Page 50527]]
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2. In appendix B to part 4044, an entry for ``July 2024, other than
July 31'' is added at the end of the table to read as follows:
Appendix B to Part 4044--Interest Rates Used to Value Benefits
* * * * *
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The values of i are:
For valuation dates occurring in the month-- -----------------------------------------------------------------------------------------------
i for t = i for t = i for t =
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* * * * * * *
July 2024, other than July 31........................... 0.0511 1-20 0.0483 >20 N/A N/A
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Issued in Washington, DC.
Gregory Katz,
Deputy Assistant General Counsel for Regulatory Affairs, Pension
Benefit Guaranty Corporation.
[FR Doc. 2024-13047 Filed 6-13-24; 8:45 am]
BILLING CODE 7709-02-P
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